Category: Archive – 2015
Late Payment Fee Directive – A framework for protection against consequences of late payments
The Minister for the Economy, Investment and Small Businesses, Hon Chris Cardona, addressed an information session regarding the transposition of the Late Payment Fee Directive (2011/7/EU), hosted by GRTU.
The directive seeks to create a framework to address the growing concern of business-to-business payments and payments by the government or public authorities to businesses, where such payments are effected beyond the agreed due date or remain overdue. This, as we are all aware, causes burdens on business undertakings, particularly small business, causing stress on cash-flow and at times resulting in bankruptcy.
The Directive helps ensure the proper functioning of the internal market by limiting and harmonising payment terms, permitting suppliers to claim compensation, and allow interest in the event of late payment. This directive does not apply for transactions between consumers, interest in connection with other payments such as the laws on cheques and bills of exchange, and payments made as compensation for damages including payment from an insurance company.
Public authorities have to pay for the goods and services that they procure within 30 calendar days following the receipt of invoice. Enterprises are automatically entitled to claim interest for late payment and able to obtain a minimum fixed amount of €40 as compensation for recovery costs, with the possibility of claiming all remaining reasonable recovery costs. The rate of interest for late payment between undertakings is agreed between the undertakings. If there is no such agreement, or in cases where the transaction is between a business and a public authority, the applicable interest rate is at least at 8% plus the ECB reference rate.
A payment period should be fixed in the contract in the case of business-to-business transactions. This period should not exceed 60 days unless this is expressly agreed in the contract and it is not grossly unfair to the creditor. Interests are due the day following the end of the fixed period.
The new measures of the directive are obligatory for public authorities yet optional for enterprises. Indeed one of the main concerns voiced by business representatives was that the nature of the market itself may be challenging to affect the benefits of the directive in cases of business-to-business transactions, since this may result in debtors to opt for other suppliers. Indeed this is a concern that as the Directive stands, will have to be addressed by the market itself. However it does provide a basis to act as a framework to such agreements even though it will not be the solution to all problems.
GRTU calls for the Commuted Parking Scheme Fund to be used for the creation of new parking opportunities
During an MCESD meeting specifically held on GRTU’s request the Minister for Transport and Infrastructure Joe Mizzi explained details about the new public transport operator and service. These included details on the acquisition by the new company, the investment it will carry out, the 15 year subsidy given by the Government and the increased service it is expected to result in.
In his intervention GRTU President Paul Abela explained that public transport is very important for our members and in fact members in the localities were transport service was poor saw their business affected as a result. Mr Abela said we should look at transport in a holistic manner because the new service provider will have little impact if our roads are still plagued with the problem of traffic congestion and parking issues.
GRTU President said that a Park and Ride system accompanied by a circular bus in the busiest localities is very important and Government should use funds from the Commuted Parking Scheme specifically for such cases and to create new parking facilities, even in conjunction with the private sector.
GRTU welcomes Air Malta’s determination to restructure and appeals for responsibility
Air Malta has strengthened its resolve to take the difficult and necessary decisions to save the national airline which will also ensure a positive outcome for the country. This was the reaction of the airlines’ chairwoman Ms Maria Micallef after receiving the news of Cyprus Airways demise by the European Commission.
GRTU is in full support of Air Malta’s restructuring and it appeals to the various stakeholders involved to be reasonable and
understanding to the situation, because if the airline does not show future sustainability it could follow in the footsteps of Cyprus Airways.
Air Malta plays an important role not only for the stakeholders direct involved but also for the tourism industry that thrives from the business generated by the airline. These stakeholders must accept this change in the airlines operations as a new beginning to make it sustainable again so that they can benefit from its survival.
GRTU successfully secures a better deal on tyre excise
GRTU met Hon Minister Edward Scicluna to discuss its concerns in relation to the new excise duty imposed on tyres as per Budget 2015.
Prior to the meeting GRTU analysed how the addition of the excise would impact different types of operators and the impact was indeed significant:
1. Large tyre importers
GRTU estimated that a company importing large commercial tyres on a regular basis (6 times a year) would have normally paid around €7K in taxes (Eco Tax and VAT) a year, while with the new Excise tax they would pay around €70K a year in taxes (excise and VAT on excise).
2. Freight forwarders
A large enterprise in this sector would change around 300 tyres a year. Up to the end of 2014 the enterprise would have paid an estimate of €1.6K in taxes (Eco Tax and VAT) while with the new system the tax element would increase to €17K (Excise + VAT).
GRTU argued that the increases on users of large tyres were too hefty and would significantly impact their competitiveness because it will increase their running costs. In addition the excise will also decrease the competitiveness of importers because it will be cheaper to change tyres outside Malta. As such GRTU suggested that the Ministry would cap the maximum amount of Excise that could be due on large tyres.
Another aspect raised by the GRTU was that whereas with the previous system eco tax was paid only once the product is sold, meaning first it is recuperated and then it is paid after, with excise, the payment is due on import. As a mitigating proposal GRTU suggested that importers would be given a longer credit term.
The Ministry accepted GRTU’s arguments and its proposals, agreeing to introduce a capping of tyres over 35kg and it also agreed to a credit term of 3 months. GRTU estimates that these changes will reduce the excise duty burden on large tyre importers by a minimum of 50%.
In addition GRTU emphasised with the Ministry that the excise duty will be even more harmful if enforcement is not effective and GRTU therefore asked for this to be beefed up. As such it suggested that the scanner would be moved on a regular basis to other areas through which importation of goods occur. This was also a proposal the Ministry found acceptable.
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Health and Safety in Construction
The Occupational Health and Safety Authority refers to photos that are intermittently posted on the media showing unsafe construction work practices and feels that it is opportune to clarify various misconceptions.
Photos posted by media – Whilst understanding the general interest of media and civic minded persons in reporting unsafe work practices to media and thus contributing in the prevention of accidents at work, unfortunately such approach will not reach the effectiveness desired if OHSA is not immediately informed. This is being said in view of the fact that most of the time,
photos are published hours and even months after the occurrence of the unsafe work practice, hence leaving the same person/s being exposed to serious and imminent danger in particular when risks of falls from height are concerned. To this end, concerned persons are being urged to immediately inform OHSA in cases where unsafe working situations are noted. OHSA adopts a confidentiality reporting procedure in order to secure the confidentiality of the complainant.
Occupational Health and Safety in Construction Sites –The construction industry is undoubtedly considered as one of the most hazardous work environments, mainly due to the continuous changing of work situations and exposure to risks of falls from height. This can be also confirmed by the number of enforcement actions taken by OHSA in cases where breaches of occupational health and safety legislation have been noted. In view of this matter, OHSA is reminding all duty holders of the legal provisions laid down in the Occupational Health and Safety Authority Act XXVII of 2000 and in particular in L.N. 281 of 2004 – Work Place (Minimum Health and Safety Requirements for Work at Construction Sites) Regulations. L.N. 281 of 2004 lays down the minimum health and safety requirements for work at construction sites which shall be followed by a number of duty holders being the Client, Contractors, Project Supervisors and Workers themselves. The term “client” means any natural or legal person for whom a project is carried out and whom is vested with the most important legal provisions. One of the main duties of the client is to appoint a project supervisor for the design stage and a project supervisor for the construction stage. Such appointment shall be made in respect of every project. The client may assume such roles, however, in order to do so one must be competent in matters pertaining to occupational health and safety. In cases where work is scheduled to last longer than thirty working days and on which more than twenty workers are occupied simultaneously, or on which the volume of work is scheduled to exceed five hundred person-days, the Project Supervisor shall submit the Construction Notification Form to OHSA at least four calendar weeks before work starts. Project Supervisors are vested with a number of other duties which shall be followed in particular those pertaining to the compilation of the required occupational health and safety documents and the coordination of the implementation of the general principles of prevention and safety.Being a complex subject, occupational health and safety requires the cooperation of stakeholders and duty holders. Healthier and safer workplaces can only be achieved if all duty holders recognise that it is in their best interest to adhere to their duties imposed by occupational health and safety legislation. Whilst recognising the pivotal role OHSA has to maintain compliance with occupational health and safety legislation, it would be unreasonable to expect OHSA to be physically present in all workplaces at all times. This has been reflected in the legislation both on a local and European level, where in the case of construction works, the client has been endowed with the main and ultimate responsibility to ensure the appropriate management of health and safety. This is also clearly reflected in L.N. 281 of 2004 which stipulates that the appointment of Project Supervisors (as laid down in the same legislation), does not relieve the client from his legal responsibilities.On finding a breach of health and safety legislation, OHSA will take the necessary and appropriate legal action. It is worthy to point out that legal action will invariably be taken against clients. For this reason, it will be in the client’s best interest to appoint reputable project supervisors and contractors who have the necessary capabilities and technical knowledge to perform well and safely the task to be entrusted to them. This essentially means that when evaluating quotations, the client should not automatically choose the cheapest one, unless it can be shown that adequate safety control measures will be taken.
Tougher penalties for breaches of Occupational Health and Safety legislation – Whilst acknowledging the importance of establishing a risk preventive culture through education channels, OHSA is currently working on dramatically increasing the penalties to be handed out in cases where occupational health and safety legislation is being breached. This approach will be reflected in an increase in the maximum fines and imprisonment terms. The intention of such approach is to deter duty holders from breaching occupational health and safety legislation.
The launch of the draft Tourism Policy
GRTU Deputy President Philip Fenech has this week attended the launch of the Tourism Policy draft which was addressed by the Minister of Tourism Dr Edward Zammit Lewis.
The policy draft included the contribution of all stakeholders which could be affected within the tourism industry. Amongst these stakeholders GRTU proposed a number of recommendations which included the proposal to maximise the use of resources within Malta’s localities. It is important that tourists are spread amongst all localities. This will ease the increasing pressure on the infrastructure resulting from the increase in tourists flow.
GRTU proposes allowing the change of use for buildings which can be used for back office work or for other activities of an economic value. GRTU also urged the Government to invest in the infrastructure within the localities so that tourists can have easy access to facilities everywhere they choose to go and stay.

